Vikram Solar delivered a strong Q1 FY27 on the volume front, with revenue reaching ₹1,566 Cr, up 88% QoQ and nearly 38% YoY. The company produced 1,085 MW of modules and dispatched 1.06 GW, up nearly 32% YoY, with almost the entire production sold. However, EBITDA margin stood at 8.06%, as the company remained exposed to external cell prices and higher input costs. With the 9 GW cell plant on schedule for first cell release in Q4 FY27, management's focus remains on backward integration and improving margins as captive cell manufacturing comes online.
Volume growth remains strong, supported by healthy module demand
Revenue for the quarter stood at ₹1,566 Cr, increasing 88% sequentially and nearly 38% YoY.
Vikram Solar produced exactly 1,085 MW of modules during the quarter and sold very close to 100% of the production.
Module dispatches stood at 1.06 GW, up nearly 32% YoY, reflecting strong volume execution.
EBITDA stood at ₹126 Cr, while PAT was ₹19.78 Cr.
EBITDA of approximately ₹125 Cr over 1 GW of volume translated into around ₹1.25/W.
Realizations improved despite a challenging pricing environment
Blended realization increased to ₹15.02/Wp, up 8% QoQ.
The improvement was driven by a change in product mix rather than an increase in base prices.
Delivery of 76 MW of DCR modules lifted the blended realization.
DCR modules achieved realizations of around ₹21–22+/Wp, providing a significant premium over the blended portfolio.
Margin pressure reflects external cell dependence and higher input costs
EBITDA margin stood at 8.06% during the quarter.
Management clarified that the lower margin was primarily linked to the company not yet having captive cells.
Compared with peers that saw a 1–2% margin decline, Vikram Solar was more affected because it remains exposed to external cell prices.
Management expects this disadvantage to be addressed once the company's cell line is commissioned.
Unit cost of goods increased by ₹1.86/Wp during the quarter.
Aluminium and copper prices increased sharply, affecting frames and ribbons, while higher crude prices impacted EVA costs.
Chinese cell prices had also increased in the previous quarter, impacting Q1 inventory costs.
Current quoted Chinese imported cell prices are around 4 cents plus 27.5% BCD.
Intense competition limited the company's ability to fully pass through higher costs.
MSS contracts provide pass-through benefits for cell costs, but not for other BOM components such as transportation, EVA and metals.
Cost control below gross margin is already improving
Every cost line below gross margin improved during the quarter.
Other expenses per watt declined to around 6%.
Finance cost per watt fell by more than 11%.
Employee costs increased as the company added staff for the new manufacturing lines.
The balance sheet remains effectively debt-free, with working capital utilisation declining and net debt-to-equity remaining almost negligible.
A ₹4,700–5,000 Cr FY27 capex cycle is underway
Vikram Solar deployed approximately ₹500 Cr of capex during Q1, with around 80% directed towards the module facility and the balance towards the cell plant.
The company expects to deploy approximately ₹4,700–5,000 Cr during FY27.
Of the ₹5,000 Cr planned capex, around ₹500 Cr has already been deployed, with no debt taken so far.
The 6 GW module facility is already fully funded.
The upcoming 9 GW wafer/ingot facility is expected to cost approximately ₹5,600 Cr.
Similar levels of capex are expected in FY28, with funding expected to be majorly backed by debt as financial closure is in process.
The targeted debt-to-equity ratio is 75:25, with the eventual structure expected to be around 70:30.
An ~8 GW order book provides strong volume visibility
The company's total order book currently stands at close to 8 GW.
Vikram Solar is equipped to produce 15.5 GW and expects to effectively deliver around 9–9.5 GW during the year.
Management remains disciplined on order selection and will consciously avoid taking negative-margin orders.
Around 7.1 GW of the order book is non-DCR, primarily coming from large accounts, including the auto book.
DCR business is positioned for faster growth as captive cells come closer
The DCR order book currently stands at around 2 GW, mainly for distribution.
The company has partnered with a domestic player to supply cells for the existing DCR order book.
Vikram Solar is currently not taking new DCR orders using cells from its own plants.
The company expects to start taking such orders a couple of months from now, closer to commissioning of the cell plant.
Management expects the DCR business to grow 2–2.5x every quarter, with CVS volumes also expected to start flowing soon.
Gangaikodan platform is progressing on schedule
Vikram Solar is building all plants within a single-fence integrated platform at Gangaikodan to capture shared utility and infrastructure benefits.
The first module rolled out on June 29, exactly on the promised date.
The 9 GW cell plant is in-built and on schedule.
The first cell release is targeted for Q4 FY27, which will take the company to roughly 70% backward integration.
The previously planned additional 3 GW cell line remains slated for FY28, but is being intentionally reserved for upgraded technology.
The board has approved increasing the wafer/ingot facility to 9 GW, compared with the original 12 GW plan.
Powerhive adds a new growth leg through BESS
Vikram Solar is setting up 15 GWh of integrated cell manufacturing and base assembly capacity under its VSL Powerhive plan.
The capacity will be developed in two 7.5 GWh phases.
Phase 1 is a 7.5 GWh base assembly plant in Chennai.
Equipment delivery is planned for November 2026, installation for January 2027 and commercial operations are targeted from March 2027.
For Phase 2, land has been shortlisted in two states, with finalisation targeted by September 2026.
A technology partner has been finalised for LFP Gen 2 large-format cells, with commercial operations targeted for Q4 FY29.
Vikram Solar has launched the Powerhive brand for C&I and utility-scale markets and is executing its first 20 MWh utility-scale solution.
Data centres and green hydrogen could anchor the next decade of demand
India added approximately 12 GW of solar during the quarter.
Total country AC consumption is estimated at 45–50 GW, while the utility market is expected to reach 30–35 GW AC this year.
C&I represents approximately a 15 GW annual market, comprising around 6–7 GW of rooftop and the balance from open-access ground-mount projects.
PM Surya Ghar and PM Kusum together are expected to contribute around 14–15 GW annually.
Fresh tariff tendering currently stands at 35–40 GW, with execution expected over the next 18–24 months.
State data-centre policies are expected to result in 25–26 GW of data centres over the next five years.
As data centres require a 5x multiplier of solar demand, management expects C&I data centres and green hydrogen to anchor Indian demand over the next decade.
ALMM-2 deferment has reopened non-DCR C&I procurement
The ALMM-2 cell mandate has been deferred to December 2026.
This has made the C&I segment active again for non-DCR procurement.
Management noted that this shift could reduce the country's overall DCR consumption estimates for the year.
Around 80 GW of grandfathered projects are permitted to use non-DCR modules.
However, procurement remains slow as customers continue to take a wait-and-watch approach towards policy developments and infrastructure/evacuation challenges.
Automation and value engineering are supporting the cost-reduction programme
The company has transitioned its module portfolio to G12 bar technology across the platform.
New automated lines have reduced manpower deployment by around 40%.
These lines have also delivered comparable improvements in line cycle time.
A dedicated cost-reduction programme is underway to lower conversion costs through BOM value engineering, alternate vendor procurement and tighter inventory cycles.
Higher-margin customer segments are becoming a bigger focus
Vikram Solar has doubled its sales team to deliberately target the mid-market.
The company has built a network of 119+ distributors and 757+ dealers.
The strategy is also aimed at improving realizations amid pricing pressure in the non-DCR market.
The mid-market is expected to generate around ₹0.50/W higher realization.
The distribution segment is already generating around ₹1–1.5/W better realizations compared with large accounts.
Management is holding back FY27 guidance until market visibility improves
Management has withheld an updated formal FY27 outlook for now.
The formal FY27 outlook shared on May 8 will be revisited at the H1 results.
Management is waiting for greater clarity around the impact of ALMM-2 deferment, volatile market pricing and the slow pace of project procurement.
Margin recovery is expected as input costs normalise
Management views the current cost pressures as largely trajectory-driven.
Margins are expected to improve as base metals, crude and older high-cost Chinese cell inventory normalise.
Until the 9 GW cell line is commissioned, EBITDA margins will remain tied to the economics of the non-DCR business.
Once captive cells are integrated into the DCR order book, management expects significant margin expansion as the company captures the cell manufacturing margins.
This is expected to bring Vikram Solar to parity with fully integrated peers.
FY28 could benefit from the ramp-up of the 9 GW cell plant
The 9 GW cell plant is targeted for its first cell release in Q4 FY27.
Assuming a standard six-month ramp-up, management is targeting 40–50% capacity utilisation during the first year of operation in FY28.
The ramp-up of captive cell manufacturing is therefore expected to be an important part of the company's margin trajectory.
Outlook
Vikram Solar's Q1 FY27 call points to a business scaling volume while simultaneously building greater manufacturing integration. The near-term environment remains challenging, with external cell dependence, higher input costs, volatile pricing and slower project procurement affecting margins and visibility. At the same time, the company has an ~8 GW order book, 15.5 GW production capability, a 9 GW cell plant on schedule, a 9 GW wafer/ingot plan and a 15 GWh Powerhive roadmap. As captive cell manufacturing comes closer to commissioning, management expects the ability to capture cell manufacturing margins to support a significant improvement in EBITDA margins.
Disclaimer - Informational only. Not investment advice.
GoIndia Advisors LLP | SEBI Registered Research Analyst | Reg. No. INH000020040 | BSE Enlistment No. - 6518